The tribunal gave the direction to Sebi while deciding on an appeal which alleged that the open offer price fixed by the acquirers of Network 18 was much less.

In February 2012, an investment agreement was entered into between Independent Media Trust — of which Mukesh Ambani-led Reliance Industries is the sole beneficiary — and six holding companies of Raghav Bahl and the Bahl Group.

Under the pact, Independent Media Trust was to invest in the six holding companies by subscribing to Zero Coupon, Optionally and fully Convertible Debentures (ZOCD).

Meanwhile, the Share Purchase Agreement between the parties was inked in May 2014. "Perusal of various clauses contained in the ZOCD agreement... led us to believe, prima facie, that by executing ZOCD agreement on February 27, 2012 the Bahl group sought to divest its control over the six holding companies and consequently sought to divest control over target company and TV18 without receiving any consideration which is rather strange and unusual to say the least," the tribunal said.

In the present case, the tribunal said that divesting the control over the target company prima facie falls within the meaning of the word 'control' as defined under Sebi's Takeover Regulations.

According to SAT, Sebi has failed to give reasons as to why various clauses contained in the ZOCD agreement do not amount to divesting control over the target company to Independent Media Trust. The tribunal said that in public interest it was directing Sebi to "re-investigate the question as to whether the respondent No 2 (Independent Media Trust) in the guise of executing ZOCD agreement, indirectly acquired control over the target company without following the procedure prescribed under the Takeover Regulations, 2011".

In case, it is found so, the tribunal said appropriate action should be taken against the concerned person or persons for violating takeover norms "so that such violations are not committed again".

In July 2014, Reliance Industries had announced taking control of Network 18 and its subsidiary TV18 Broadcast Ltd.

SAT said the appellants' argument that Sebi should have approved the open offer price at Rs 5,68,430.32 per share of Network18 instead of Rs 41.04 apiece is without any merit.

As per the share purchase agreement, purchase of 60,000 shares of the six holding companies by Independent Media Trust constituted acquisition of 100 per cent shares of the six entities.

Since that amounted to Independent Media Trust indirectly acquiring shares having voting rights in excess of 25 per cent in Network 18, the open offer was triggered. If the gross amount paid under the share purchase agreement dated May 29, 2014 for acquisition of shares of the six holding companies and RB Holdings Pvt Ltd is segregated, then Independent Media Trust has paid less than Rs 41.04 per share of Network 18.

"Therefore, in the facts of present case, decision of Sebi in approving the open offer price at Rs 41.04 per share, by taking into consideration the amount invested under the ZOCD agreement cannot be faulted," the order said.